Impact of E-Commerce on Operations Management

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Operations management has had to deal with a new type of business management in a business world that is vastly changing with new technology. Operations managers have had to adjust and retool how business is done since the inception of e-commerce. The impact that e-commerce has had on how an operations manager address a situation can vary from extreme to barely noticeable. Management has also had to learn how to adopt new technology with the growing e-commerce world. This has brought obstacles and resolutions within a business. E-commerce has also allowed businesses to grow where before the business would be limited to the area that surrounded the business. E-commerce has helped shape the operations management field over the last few decades.

An operations manager is defined as the following: the design, execution, and control of operations that convert resources into desired goods and services, and implement a company’s business strategy (Operations, 2011). Then we have e-commerce or electronic commerce which is defined as business conducted through the use of computers, telephones, fax machines, or other electronic appliances without the exchange of paper-based documents (E-Commerce, 2011). Operations management has been around for a long time while e-commerce is still in its infancy. E-commerce has only been around since the 1970’s and really did not start taking off until the 1990’s. For operations managers the usual duties before e-commerce were: preparing program budgets, facilitating programs around the company, controlling the inventory, handling logistics, and interviewing candidates and supervising employees (Ops, 2010). In the e-commerce world many of these duties are still performed; however e-commerce has allowed for more streamlined work and less of the old duties of operations managers. E-commerce is changing manufacturing systems from a mass production to a demand-driven system (Gunasekaran, 2011). For example, for an operations manager at a brick and mortar store interviewing potential employees and taking inventory were a normal job task. Today if the business is an e-commerce retailer with no brick and mortar store interviewing potential employees and taking inventory may not be an important role for an operations manager. Today businesses can choose to have inventory drop shipped directly from the manufacturer resulting in no inventory to be accounted for.

As an operations manager e-commerce has had an effect on the key elements that are relevant to how an operations manager looks at a business model. These key elements include the following: design; layout and flow; inventory planning and control; and quality management. All four of these key elements have played an important role in operations management in the past and are now being reshaped to accommodate e-commerce. The first key element is the design. The design can make or break a business and it is up to the operations management to ensure the correct design is in place. One way of doing this is to use the supply network perspective. The supply network perspective allows any operation to understand how it can compete effectively within the network (Slack, 2010). For management this will allow them to think about their suppliers and customers as an operation. By using the supply network perspective the operation can also identify issues early on and plan for changes before they happen. Design also is in the product, by using a quality function deployment (QFD) it can help achieve a high quality of product designs. There are also various other computer-based technologies that can help assist a company in quality product designs. These products include computer-aided design (CAD), 3D modeling and ProEngineer (Gunasekaran, 2002). These programs help in designing the best product and allow the designers and operations management to be in different places because the information can be exchanged over the internet,

Layout and flow is the next...
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